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Architecture Billings Index Drops to All Time Low
Declining Business Cnditions Also Reflected in Historic Downturn in Project Inquiries
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For Immediate Release |
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Washington, D.C., November 19,
2008 — On the heels of a six-point drop in September, the Architecture
Billings Index (ABI) plummeted to its lowest level since the survey
began in 1995. As a leading economic indicator of construction
activity, the ABI shows an approximate nine to twelve month lag
time between architecture billings and construction spending. The
American Institute of Architects (AIA) reported the October ABI
rating was 36.2, down significantly from the 41.4 mark in September
(any score above 50 indicates an increase in billings). The
inquiries for new projects score was 39.9, also a historic low
point.
“Until recently, the institutional sector had been somewhat
insulated from the deteriorating conditions affecting the
commercial and residential markets,” said AIA Chief Economist
Kermit Baker, PhD, Hon. AIA. “Now we are seeing that
governments and nonprofit agencies are having difficulties getting
bonds approved to finance large scale education and healthcare
facilities, furthering the weak conditions across the construction
industry.”
Key October ABI highlights:
• Regional averages: Northeast (44.3), South (40.0), Midwest
(37.4), West (34.9)
• Sector index breakdown: mixed practice (45.1), institutional
(42.1), commercial / industrial (33.6), multi-family residential
(34.2)
• Project inquiries index: 39.9
About the AIA Architecture Billings
Index
The Architecture Billings Index is derived from a monthly
“Work-on-the-Boards” survey and produced by the AIA
Economics & Market Research Group. Based on a comparison of
data compiled since the survey’s inception in 1995 with
figures from the Department of Commerce on Construction Put in
Place, the findings amount to a leading economic indicator that
provides an approximately nine to twelve month glimpse into the
future of nonresidential construction activity. The diffusion
indexes contained in the full report are derived from a monthly
survey sent to a panel of AIA member-owned firms. Participants are
asked whether their billings increased, decreased, or stayed the
same in the month that just ended. According to the proportion of
respondents choosing each option, a score is generated, which
represents an index value for each month.
About The American Institute of Architects
For over 150 years, members of the American Institute
of Architects have worked with each other and their communities to
create more valuable, healthy, secure, and sustainable buildings
and cityscapes. By using sustainable design practices, materials,
and techniques, AIA architects are uniquely poised to provide the
leadership and guidance needed to provide solutions to address
climate change. AIA architects walk the walk on sustainable design.
Visit www.aia.org/walkthewalk.
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